It doesn’t look like there will be any break this year in the heated residential real estate market in Greater Victoria.
The B.C. Real Estate Association predicts in its latest forecast Thursday that the region’s home prices will rise by 15.4 per cent this year from 2015 and by another 6.2 per cent in 2017.
The forecast puts additional pressure on buyers already facing stiff competition for homes in popular areas where prices have been climbing amid shrinking listing numbers.
Concerns have been raised about affordability in the southern half of B.C., where prices are marching upward and the number of sales have broken records for three straight months.
The average price of a single-family house in Greater Victoria reached $763,517 in May.
Higher prices and strong demand in B.C. are being fuelled by a strong economy, consumer confidence, job growth, higher retail sales, and out-of-province buyers, including Albertans, the forecast said. Net interprovincial migration was close to 17,000 people last year, the highest in almost 20 years.
This year is expected to see the average B.C. home price through the Multiple Listing Service increase by 20.4 per cent to $766,600, the association said. Next year should see prices move up at a slower rate, by 3.4 per cent.
Vancouver-area buyers are facing a price increase of between 22 and 25 per cent this year.
A single-family house in the Lower Mainland is now often considered to be a luxury product, as average prices top $1 million.
The Real Estate Board of Greater Vancouver said Thursday May was another record-breaking month. It said homes are selling at an unprecedented rate in communities across the region stretching from Whistler to South Delta.
Sales last month were 35 per cent above the 10-year sales average for May and rank as the highest sales total on record for that month. The board said the benchmark price for detached properties increased to over $1.5 million, a 37 per cent jump from May 2015.
By year end, a record 115,000 housing units are expected to be sold within the province, the provincial association’s forecast said. That is 38 per cent higher than the 10-year average of 83,000. Next year, B.C. sales are expected to reach 105,600 units.
In Greater Victoria, the association predicts that the average price, for all types of housing, including condominiums and townhouses, will reach $602,000 this year, and $618,000 in 2017.
This year, a record 8,960 homes are expected to change hands in the capital region, beating the previous record of 8,403 set in the 2007, prior to the recession.
“The nearly 14 per cent increase year-over-year is the fourth consecutive year of sales growth,” the association said.
As sales numbers jump, inventory drops, driving up prices, the report said.
Homebuilders constructing units will help meet demand, but more construction will be needed in the capital region to keep price increases from accelerating even more, it said.
Greater Victoria is home to many high-end properties, a segment that Sotheby’s International Realty Canada anticipates will remain strong.
The first five months of this year saw 388 single-family homes sold for $1 million or higher in the capital region, the firm said in new report. That’s an increase of 240 per cent from the 114 homes sold in the same months last year.
In the $4-million-and-up category, a total of eight houses have sold so far this year, compared to none in that range for those months last year, Sotheby’s said.
“We expect the intensity experienced in the first few months of 2016 to remain into the foreseeable future,” said Tom Stratton, managing broker for Sotheby’s in Victoria and Kelowna.
There are currently 18 residential properties for sale at $4 million and higher through the Victoria Real Estate Board.
The highest is 529 Swanwick Rd. in Metchosin at $28.8 million, followed by 3195 Humber Rd. in Oak Bay at $14.9 million, 6342 Old East Rd. on the Saanich Peninsula for $12 million, and 9344 Ardmore Dr. for $11.8 million.
Sotheby’s said luxury homes sales are propelled by economic optimism, strong employment, Vancouver and Alberta buyers, and increased awareness of Victoria as an investment opportunity among Chinese buyers.